Colombia Power Key View
|Fitch Solutions Sector Intelligence
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Colombia Power Key View
- 15 Aug 2022
Key View: Colombia's power market is expected to achieve robust overall growth in 2022, with a downturn in thermal generation offset by higher output from the hydropower and non-hydropower renewables segments. Growth momentum is expected to slow over the medium term following the completion of the Ituango hydropower project, which is expected to be fully commissioned by 2025, though there is some upside risk from the growing project pipeline in the renewables sector, particularly in terms of the underdeveloped wind power segment where investor attention is starting to turn to the potential on offer in the offshore wind power market. Consumption rates are also expected to rise over the coming years, in line with wider economic growth and diversification, as well as efforts to expand electricity grid connections in remote, rural areas of the country.
Headline Power Forecasts (Colombia 2021-2026)
|Indicator ||2021e ||2022f ||2023f ||2024f ||2025f ||2026f |
|Generation, Total, TWh ||71.7 ||76.1 ||81.6 ||87.4 ||91.0 ||93.7 |
|Consumption, Net Consumption, TWh ||66.8 ||70.2 ||74.6 ||79.6 ||83.1 ||85.9 |
|Capacity, Net, MW ||20,047.9 ||21,342.3 ||22,667.2 ||23,644.2 ||24,569.2 ||24,937.9 |
|e/f = Fitch Solutions estimate/forecast. Source: EIA, IRENA, UPME, Fitch Solutions |
Latest Updates And Structural Trends
- Total electricity generation in Colombia is forecast to increase by 6.1% in 2022, as capacity at the Ituango hydropower project starts to come online, alongside a range of non-hydropower renewables projects. This will take output to a total of 76.1TWh, ahead of anticipated consumption of 70.2TWh, though grid losses of around 7.6% of output will impact on the supply surplus.
- In the short term, strongest growth is expected in the non-hydropower renewables market where capacity is expected to increase by over 55% in 2022, driven primarily by the solar power segment followed by biomass. Geothermal power does not feature in the Colombian power market and wind power capacity is expected to record modest growth in 2022, though growth is expected to strengthen in the wind power segment from 2023 onwards.
- The offshore wind segment in particular is attracting investor interest. In May 2022, Monomeros signed a memorandum of understanding with the Baranquilla APBAQ to work on a USD300mn offshore wind powered green ammonia production plant in Colombia. The proposed facility will be fuelled by a Copenhagen Infrastructure Partners offshore wind project, which will offer 350MW initial capacity with potential to reach 500MW. The wind farm is planned to be operational in 2026.
- In July 2022, Arup was selected to conduct a feasibility study for the Vientos Alisios offshore wind project located off the coast of Barranquilla. The facility, to be developed by BlueFloat Energy, would feature 28 units of bottom-fixed turbines and has secured a 200.0MW grid connection. The project is expected to have a capacity of 500.0MW. Construction of the project is slated to begin in 2024/2025, according to Renewables Now.
- Solar power accounts for almost half of installed renewables capacity. Projects in the solar segment include Enel Green Power's 486.7MWdc Guayepo I & II solar photovoltaic park in the Colombian municipalities of Ponedera and Sabanalarga. The project will also feature two transformers of 220MVA. Ground was broken on the USD290mn project in July 2022. It will come up on a 11.1sq km plot with more than 820,600 solar panels interconnected with each other, according to a press release from Enel.
This report from Fitch Solutions Country Risk & Industry Research is a product of Fitch Solutions Group Ltd, UK Company registration number 08789939 ('FSG'). FSG is an affiliate of Fitch Ratings Inc. ('Fitch Ratings'). FSG is solely responsible for the content of this report, without any input from Fitch Ratings.
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